ST. LOUIS — Warning that it would be “fiscally irresponsible,” Mayor Lyda Krewson on Thursday vetoed a bill that would return supervision of all city Fire Department pensions to a firefighter-controlled board.
The Board of Aldermen earlier this month approved the bill despite warnings from Comptroller Darlene Green, Budget Director Paul Payne and others that the measure would reverse some reforms enacted in 2012 that put a check on the city’s pension liabilities.
Krewson, in her veto message to aldermen, said she shared those concerns.
“Across the United States, we are in the midst of a national public pension crisis,” the mayor said. “Local and state governments struggle to provide much-deserved pensions to retirees, and at the same time deliver critical services to current residents and businesses.”
The bill’s sponsor, Alderman Tom Oldenburg, D-16th Ward, reiterated that it merely moves oversight of a pension plan set up a few years ago for younger firefighters and new hires to the decades-old board that continues to run a separate system for veteran firefighters and retirees.
The measure makes no changes to any pension benefits, he said, and that any sought in the future would still need aldermanic approval.
The mayor’s action sets up a veto override fight when the board reconvenes April 19. That’s the day before Krewson leaves office and about two weeks after the April 6 general election.
Krewson asserted that the new pension plan now run by a board on which city appointees hold the majority “has achieved significantly better financial performance” than the old system’s board.
She said in the year ending last Sept. 30, the new system’s board earned 10.28% on investments and the old system’s board earned 4.2%.
Oldenburg said in response that “looking at just one year is not the way to present a full financial analysis” of a pension plan. He said the old system since 1986 has averaged an 8% return per year.
Krewson also indicated that the governance change could put further pressure on city finances already strained by the pandemic-spurred economic downturn.
She said tax revenues over the past two fiscal years are likely to be down by more than $90 million “with the toll continuing to mount into the next fiscal year and beyond.”
She also noted that one of the city’s main revenue sources, the earnings tax, would be eliminated unless residents at the April 6 election vote to continue it another five years. The retention vote is required by state law.
She said next year’s required contribution by the city to the old pension system is $3.4 million, up from $1.3 million this year.
The oversight change for the new pension system was promoted by the politically influential Local 73 of the International Association of Fire Fighters amid the ongoing election campaign for mayor and 16 aldermanic seats.
Two mayoral candidates on Tuesday’s primary ballot — Aldermanic President Lewis Reed and Alderman Cara Spencer — voted for the bill.
Another mayoral candidate, City Treasurer Tishaura Jones, opposes the measure. A fourth mayoral hopeful, Andrew Jones, could not be reached for comment Thursday.
Oldenburg, the sponsor, has said the bill would be a morale boost for city firefighters. He also said the city would see administrative cost savings by putting the two systems under the old board, a point disputed by Payne, the budget director.
An override attempt requires 20 votes on the 29-member board to succeed. Aldermen passed the bill, 19-3. But two aldermen who supported the measure when it was given preliminary approval in January were absent when that final vote was taken.
One other alderman abstained and four voted “present.”
Oldenburg said he wasn’t surprised by the veto and had been told by a mayoral aide on Wednesday that it was coming. Since then, he said, he and other supporters had shored up the votes for the bill and are confident that the veto will be overridden.
The Missouri Legislature also must sign off on the change; such a bill is pending in Jefferson City.
Updated at 7:40 p.m.